Withdraw FDIC government guarantees from the big banks

Proposal 

Withdraw the FDIC government guarantees from the criminal big banks.
JP Morgan, Bank of America, Citigroup, Wells Fargo etc.
Any primary dealer to the Federal Reserve.
FDIC is nearly bankrupt anyway and couldn't cover the losses to one of these big banks, let alone several.

Pros

This would institute a flow of depositor funds out of the big banks to better run smaller banks.
The big banks would have to scale down their asset base.
They would have to sell off parts of their loan portfolios to small banks.
They would sell off their branch networks - it wouldn't be worth them keeping them.
It would break up the power of the big banks and the current banking cartel.

The speculative activities of the big banks would no longer be subject to taxpayer bailouts, they could be allowed to go bust.
The huge derivatives exposures of the big banks would be drastically scaled down - they would institute better risk management themselves knowing they would no longer by bailed out by taxpayers when things went wrong.

Cons

The announcement of such a measure would cause bank runs on the big banks.
Some way of mitigating this effect would have to be found.
Perhaps a gradual reduction in the amount of the FDIC guarantee might work so that high net worth individuals left first (which are the profitable accounts).

Some means of funding large loans to large corporations would have to be found.
Although large corporations are already sitting on large piles of cash so the market for this is relatively small.
They could go into the market directly and issue bonds for much of the funding if they wanted to borrow large amounts (as already happens).
Or agreements between a number of smaller banks could be made to spread the risk on a large loan.

Overall Effect
The overall aim and overall effect would be to break up the banking cartel that is currently operating, whereby a small number of large banks control a large percentage of the market, and institute a system of much better competition between a large number of smaller banks.

The current power of the big banks over the government would be dissipated.

Standard oil got broken up into smaller parts in 1910 because it's power over the market became too great. It is very similar to the big banks of today.

A failure of a small bank would not cause financial carnage, such as the failure of a JP Morgan would do today.
The current threat of financial Armageddon would be much reduced.

Thoughts on how this idea might be made to work appreciated.